Tim Cook: Apple Watch Sales 'Exceeded Expectations'

[firewood]

Trying to hide it in 'Other products' reveals Cook's insecurity and complete lack of confidence in this device.

The opposite. It's more likely Cook's secure knowledge that many other watch makers consider the Apple Watch their biggest completion for customers, and are looking for every tiny bit of competitive information they can get to try and halt Apple's momentum.

Plus, given that the sales were nearly 100% constrained by manufacturing output, it tells the competition exactly how fast Apple can ramp up production of new devices.

 

[C DM]

The market doesn't believe Tim Cook, and why should it?

Nothing speaks louder than clear sales figures. That has always been a clear indication of the health of a product. Cook effectively signalled the failure of the watch even before it went on sale when he stated that he wouldn't reveal sales figures.

And now, he is having to justify the watch couched in descriptive adjectives that mean nothing other than that he is trying to hide the failure of the product. It's a sad turn of affairs.

I wonder if he will use the same tactic for Apple Music. I note that he was happy to boast of millions of people signing up for it—even though it's currently free. Is that not helping the competition? Apparently not in Cook's book. But will he give concrete figures after a year of paying subscribers? If he doesn't, we will know it has failed, as he has already divulged a rough figure of millions now.

I guess we now know what all that sapphire was wanted for: mirrors. The smoke is provided by the forest fires in drought-stricken California.

Or the numbers haven't been revealed for other good reasons.

 

[nutmac]

Since we don't know the average selling price, Apple sold somewhere between 2 and 3 million watches, which really isn't that bad since the supply was extremely constrained and stores did not sell any watches until very recently.

Having said that, I am not sure watchOS 2 will be enough to jump start the sales. At the very least, Apple should introduce few more bands (and perhaps getting rid of unpopular ones) and accessories (e.g., Night Stand dock).

 

[RDeckard]

While you have your head up staring at your watch screen. What a liberating experience.

The watch is designed to be glanced at for a few seconds at a time. If anyone is staring at a watch for an extended amount of time then the person has other, much larger, issues at hand.

 

[postpc]

Well, I would like to know exactly how many Apple Watches were sold, broken down by model and band choice. Please also tell us how much was spent on R&D, sales, marketing, etc. This is really useful information.

Yours truly,
Samsung

So they are afraid of Samsung now, is that what you're saying?

 

[Kobayagi]

You and me too, I can't help but remember the comments on MR after the Galaxy Gear was released, laughing how Apple wouldn't release something with less than 2 days battery life and a touchscreen/simple zoom interface. As far as I can see it's just a nicer version of a Gear. Nobody I know who's tried it has said its interface was intuitive like the iPhone immediately was, though they'll 'learn to love it'. =/

Ah well, I'm not one to judge on how people spend their money. If it works for them and it's a useful tool, it's good that Apple have a product in the wearable market.

Hahaha, the comments on that link are gold.

 

[Rogifan]

It's not possible sales could be higher in June then April or May. Slice Intelligence said they dropped 90%. /s

So Cook said sales in June were the highest. He said 94% of buyers are using theirs every day. He said they only came into supply/demand balance within the last couple days. He said they're going to be expanding the channel going into the holidays. Yep that really sounds like a flop to me.

No, what the flop is is all these ANALysts and their silly predictions based on absolutely nothing. Apple gave no guidance, color or expectations around the Watch. The category itself is in its infancy and nowhere close to being mature. There's no way anyone had good data to accurately predict sales or what could be considered success or failure with the Watch. The only thing these quarterly results tell me is Beats headphone sales appear to be on the decline (or the summer months are soft for headphone sales).

 

[craig1410]

The market doesn't believe Tim Cook, and why should it?

Nothing speaks louder than clear sales figures. That has always been a clear indication of the health of a product. Cook effectively signalled the failure of the watch even before it went on sale when he stated that he wouldn't reveal sales figures.

If you really believe that then you are incredibly naive.

Apple never report 'sales' until the goods are in the hands of the end user so any orders they have so far been unable to fulfil would not be reportable. So, if they were to report on what you call "clear sales" it would currently be anything but clear because it would significantly understate the real situation. Why would they want to do that? They are still rolling out the product to new countries and haven't really managed a full quarter for the Watch yet. There is also the holiday quarter at the end of the year when it's likely that Watch sales will surge. Until the product is available in all countries and is in supply/demand balance and has gone through a full annual cycle I see no reason for Apple to give further details.

Once supply/demand is in balance and once the revenue is high enough to justify a separate category then perhaps they will split it out but they are not going to help competitors evaluate potential market size in the meantime. Once serious competition appears such as happened with Android in the iPhone market, then Apple will be more likely to report sales figures.

 

[groovyd]

As the excitement had been building for a long time over this first-gen apple watch led a number of people to purchase them right away we have to remember there is a much bigger pile of people who had this idea to let them work the first-gen bugs out and dive in on the second. I think this is still very much an early adopter product that will grow immensely with iterations and refinements in both sw and hw. The iPhone was the same way if you look back on the adoption over time leading up to and following the iPhone 2 and the opening of the iOS to 3rd party apps with the opening of the App Store.

 

[the8thark]

Right. Low expectations. And that's why Apple spent a HUGE amount of money developing the Watch, a new product category, and all the marketing and preparation at the stores to handle sales.

Yes, to sell a product with low expectations...

Remember Jobs satying he wanted 1% of the Smartphone Market when the iPhone was launched in 2007? That's low expectations. And I think the watch was the same.

 

[firewood]

According to same analysts, Apple Watch sales were around 1.2 million...

If 1.2M is anywhere close to the real number, then the average selling price of the Watch line has to be around or over $900 to cover that extra Billion that appeared in the Other category when including declining iPod sales. The only way to get close to that ASP is by selling a fair number of Edition Watches (10's of thousands?). So my random guess is that they sold a lot more watches, at a lower ASP, and thus including far less Edition Watches... but I could be wrong...

 

[FieldingMellish]

The entire market for an Apple Watch has theirs already.

 

[doelcm82]

The market doesn't believe Tim Cook, and why should it?

Nothing speaks louder than clear sales figures. That has always been a clear indication of the health of a product. Cook effectively signalled the failure of the watch even before it went on sale when he stated that he wouldn't reveal sales figures.

And now, he is having to justify the watch couched in descriptive adjectives that mean nothing other than that he is trying to hide the failure of the product. It's a sad turn of affairs.

I wonder if he will use the same tactic for Apple Music. I note that he was happy to boast of millions of people signing up for it—even though it's currently free. Is that not helping the competition? Apparently not in Cook's book. But will he give concrete figures after a year of paying subscribers? If he doesn't, we will know it has failed, as he has already divulged a rough figure of millions now.

I guess we now know what all that sapphire was wanted for: mirrors. The smoke is provided by the forest fires in drought-stricken California.

The market is not reacting to sales figures, but to their expectations of future sales. Apple gave very clear figures for the iPhone, and they were good. They represent a much bigger share of Apple than the Watch does. But the market didn't do what you thought it would do with clear figures (even good ones). So clear figures are not a good predictor of what the stock market will do.

Personally, if the stock is still down tomorrow morning, I will pick up a few shares. The ones I bought last September are coming up on one year old, and I would like to sell them, but that will leave me with no Apple in my portfolio. Buy the dips has been a good strategy for me so far. Not the greatest strategy (some who have bought and held forever have done better), but a good one, and I've made a lot of money on AAPL.

 

[DakotaGuy]

I just don't see a lot of young people wearing watches anymore. Apple will sell some watches and it will probably do fine as a hobby product, but honestly I don't see it becoming the next "big thing" like the iPhone. I still wear a watch, but I'm in my late 30's and my younger friends in their early 20's laugh about it saying that no one wears them anymore except old farts.

 

[Rogifan]

According to same analysts, Apple Watch sales were around 1.2 million..

Doesn't seem all that strong to me, but I must admit, I have always been extremely skeptical of this product.

And where are they coming up with that figure? We don't know what portion of "other" represents Watch and we have no idea what the average selling price is. Without those two things it's impossible to figure out sales.

 

[Rogifan]

Trying to hide it in 'Other products' reveals Cook's insecurity and complete lack of confidence in this device.

So I guess Apple has no confidence in TV either since it's also included in other.

 

[AdonisSMU]

They have given a pretty good indication of how many they have sold so why not be transparent.Im all in on the watch but can't persuade anyone I know to get one despite them mostly having more money than me and being impressed with what it can do.

I don't know... I think public opinion may have turned a corner. At first no one was here for the AW now all of the sudden the mood has shifted and people ask me about my watch and what it does. People even know that I'm wearing the link band. I was kinda shocked honestly. This morning the guy at the Duane Reade was blown away and my cousins who both own Android phones were like man that watch looks nice.

 

[firewood]

The entire market for an Apple Watch has theirs already.

So, you're saying the "Other" category will shrink back much closer to 1.7B next quarter? Let's check on your prediction in 3 months and next year after the Christmas holiday buying season.

 

[craig1410]

And where are they coming up with that figure? We don't know what portion of "other" represents Watch and we have no idea what the average selling price is. Without those two things it's impossible to figure out sales.

"Chief Financial Officer Luca Maestri told The Associated Press that revenue from the watch was "well over" that $952 million increase. He said the category also includes revenue from iPods and accessories, whose sales fell in the quarter."

So sounds like Watch sales were around or above the $1B mark. You can then make some assumptions about average selling price to estimate unit sales. If average selling price was at $399 then that would suggest 2.5 million units. I expect it will be a little bit higher ASP to account for steel watch buyers so $500 ASP would mean 2 million units for example. Still some guesswork required obviously.

 

[nfl46]

I can't believe any of you guys bought an Apple Watch. What a waste of money!

 

[craig1410]

I can't believe any of you guys bought an Apple Watch. What a waste of money!

Worth it for Pay alone...

 

[Noble Actual]

Have yet to see one actually being worn.

Might have to do that no one gives a **** about it i

So I guess Apple has no confidence in TV either since it's also included in other.

When have they ever had confidence or cared about the Apple TV? Its a hobby to them.

The iPods got updated first than the Apple TV. lol

 

[Iconoclysm]

I just find this hard to believe. Guess most bought the $399 watch. Its a toy after all.

There's that toy word again...can't count the number of times the iPhone and iPad were called "toys".

 

[Rogifan]

"Chief Financial Officer Luca Maestri told The Associated Press that revenue from the watch was "well over" that $952 million increase. He said the category also includes revenue from iPods and accessories, whose sales fell in the quarter."

So sounds like Watch sales were around or above the $1B mark. You can then make some assumptions about average selling price to estimate unit sales. If average selling price was at $399 then that would suggest 2.5 million units. I expect it will be a little bit higher ASP to account for steel watch buyers so $500 ASP would mean 2 million units for example. Still some guesswork required obviously.

The point is it's all guesses. Gene Munster guesses ASP is $550. Ben Bajarin thinks closer to $400. Nobody outside of Apple execs have any way of knowing so all these guesses are pointless.

 

[mi7chy]

That blue band is horrible. Even Samsung's fake pleather looks better.

Wonder how watch sales compare to TV and iPod. I'm guessing TV > iPod > watch.